Ford, SK On To End $11.4 Billion Battery Venture Amid EV Rollback, CAFE Relaxations

Ford Motor Co. (NYSE:F) and South Korean battery manufacturer SK On have agreed to end the battery manufacturing venture amid EV headwinds due to regulatory changes announced by President Donald Trump and falling demand.

Ford, SK On End Partnership

The South Korean battery manufacturer, a subsidiary of SK Innovation, said it has ended the EV battery partnership at two plants in the U.S. to shift focus towards Energy Storage Systems.

"The production start schedule for the Tennessee plant remains flexible at this time, as it is related to the ownership transition," SK On said, sharing that the Kentucky plant would now be owned in full by Ford, while it will assume ownership of the battery plant in Tennessee.

The decision comes as part of an overhaul in strategy to reduce debt and increase profitability and financial structure, with the battery maker reporting multi-million dollar losses in recent times as EV demand falls.

The venture, BlueOval SK, had kicked off EV battery production at the $5 billion Kentucky plant, with the first batteries being produced for the F-150 Lightning EV Pickup Truck, which could now be scrapped with Ford's EV sales plunging 60% in November. In total, the companies had invested close to $11.4 billion in the venture to build the plants.

Trump Rolls Back CAFE Norms

Meanwhile, Trump recently rolled back Corporate Average Fuel Economy (CAFE) Standards as the current Transportation Secretary Sean Duffy criticized the "backdoor EV mandate" in the auto industry, spurred on by the previous Biden administration and Transportation Secretary Pete Buttigieg. Trump's decision was hailed by Ford CEO Jim Farley, who had earlier predicted that EV adoption in the U.S. would be at 5%.

Despite this, Farley had earlier reaffirmed his and Ford's commitment to EVs, saying that the company would not "cede" to Chinese automakers in the EV race. "We can't walk away from EVs, not just for the US, but if we want to be a global company," Farley had said.

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Price Action: F declined 0.30% to $13.37 during Pre-Market, according to Benzinga Pro data.

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